“After a disappointing performance in the third quarter of 2011, it appears that Connecticut’s labor market has returned to a modest pace towards recovery,” noted Andy Condon, Director of the Office of Research. Our declining unemployment rate is particularly good news. However, forecasts for job growth in 2012 remain cautious and uncertain with most analysts predicting levels much like what we saw this past year.”

Labor Force: Connecticut’s unemployment rate continues to descend, dipping another two-tenths in December 2011 to 8.2%. Since July 2011, when the unemployment rate was 9.1%, the jobless rate and the number of unemployed have fallen appreciably for five consecutive months. Employment levels from the labor force data/household survey have also shown robust increases (at the 95% confidence level) since August 2011. What makes this unemployment rate decline even more amenable is the fact that the labor force (adults looking, able, and willing to work) has been increasing over the same period. Connecticut’s labor force is still down over the year, but is up over 20,800 (1.1%) since bottoming in August 2011.

Connecticut’s seasonally adjusted labor force numbered 1,891,000 in December 2011, up 3,400 over the month (0.2%) but down 5,700 (-0.3%) from a year earlier, with 16,900 fewer unemployed people (-9.9%) than last year.

Unemployment: Based on the household survey, the estimate of people unemployed, seasonally adjusted, was down 4,700 from November to 154,500, and the unemployment rate decreased two-tenths to 8.2 percent, which is below the national rate of 8.5 percent. Last December, Connecticut’s unemployment rate was 9.0 percent. The Connecticut unemployment rate has not been this low since May 2009. Average weekly initial unemployment claims in December 2011 for first-time filers decreased over the month by 3,548 (-41.4%) to 5,024 and were up just 52 claims from this time last year, or 1.0%. Last month’s spike in claims is likely attributable to Storm Alfred and was temporary as the seasonally adjusted average weekly initial claims level for December is now below October’s level (5,112).

Nonfarm Jobs: December’s total nonfarm job estimate grew slightly by 600 positions or less than 0.05%. Since December 2010, the state has added 9,000 jobs (0.6%) for a current employment level of 1,627,800. The November Connecticut jobs estimate of a 100 increase was revised lower by 1,500 to a 1,400 decline (-0.1%). The state has now created 10,000 jobs or a 0.6% employment growth since January 2011. Most of this gain has come since August (10,300). Four of Connecticut’s ten employment supersectors had gains, while five had declines, and one sector was unchanged last month.

The trade, transportation and utilities sector led all major sector growth in December, adding 2,500 jobs, or 0.9%. The retail trade component in this supersector provided the largest job gain (1,900, 1.1%) last month, boding well for holiday sales in the state. The transportation segment added personnel (+800, 1.7%), perhaps exhibiting positive holiday activity from e-commerce. Meanwhile, the wholesale trade part slightly declined (-200, -0.3%) last month. This large supersector has contributed the most sector job growth since last December (+5,700, 2.0%).

Leisure and hospitality (800, 0.6%) was the next largest job sector advancer, with the smaller arts, entertainment, and recreation component adding 1,000 positions (4.1%), while the larger accommodation and food service portion eased down 200 jobs or -0.2%. Leisure and hospitality was up 1,600 (1.2%) over the year.

Education and health services contributed positively this month, adding 500 jobs (0.2%). The education portion was slightly lower (-100, -0.2%) consistent with the end of the college semester, but healthcare and social assistance continued to add jobs (600, 0.2%). This sector is the second largest job contributing grouping since December 2010 (5,100, 1.6%).

The information sector had a marginal increase of 100 or 0.3%. This sector is higher by 400 (1.3%) since last December. All private sector industries added 700 positions in December and have increased 9,400 (0.7%) in employment since December 2010, and have added 10,700 (0.8%) since the beginning of 2011.

The manufacturing sector lost 1,500 jobs (-0.9%) in December, the largest major sector decline last month. The durable goods portion declined the most (-1,300, -1.0%) and non-durable goods contributed another 200 (-0.5%) to the overall monthly decline. Production industries are now lower since last December (-2,300, -1.4%).

The financial activities category finished 2011 lower by 900 (-0.7%) jobs. Both finance and insurance (-800, -0.7%) and real estate (-100, -0.5%) figured in on the job loss. Financial activities industries are the biggest declining major sector over the year (-4,300, -3.2%).

Other services eliminated 400 jobs (-0.7%) in December and are lower by 500 (-0.8%) since December 2010. This sector had been bolstered since Storm Irene with activity in repair and maintenance services, but fell off this month as storm remediation tapered off.

The professional and business services sector lost 300 positions (-0.2%) last month but is a strong job contributor over the year (3,300, 1.7%). The monthly loss in this sector was mainly attributed to a 900 (-1.1%) decline in professional, scientific, and technical services. This loss was partially offset by a 600 (0.7%) gain from administrative and support services (which includes employment services).

All government employment fell slightly (-100, or less than 0.05%) last month. Both federal and local government were unchanged in December, while state government dropped by (-100, -0.2%). Compared to last December, the government sector is lower by 400 (-0.2%, note: Native American Indian government and gaming employment are tallied in local government).

Construction employment was unchanged in December at 49,100. Building sectors are higher since December 2010 (500, 1.0%), but have come down since July when the sector was estimated at 51,100 jobs.